Non-profit organizations and their leaders juggle enormous and varied responsibilities daily – from managing tight budgets to engaging volunteers and donors to fulfilling the organization’s mission. Yet, since so many non-profits are singularly focused on a particular cause, organizations often neglect to identify and protect against risks that could expose the organization and its board members and officers.
Just as any business or organization has risks associated with employees, board members, data, or fraud, non-profit organizations of all sizes are not immune. Claims and threats of litigation can be from vendors, donors, competitors, employees, and even government regulators. Non-profit organizations file twice as many D&O claims as public and private companies. In addition, 85% of lawsuits filed are employment-related, and every non-profit organization is at risk of a data breach as they keep and maintain donor financial files, employee records, client data, and even volunteer data.
Non-profit organizations are mostly like any other organizations, with one significant difference: They don’t turn a profit. This type of organization has been granted tax-exempt status by the IRS, which requires them to have a unique form of coverage. The following are typical examples of non-profit organizations that require special coverage:
- Federal credit unions
- Charitable organizations
- Scientific organizations
- Amateur sports associations
- Public safety testing organizations
- Religious organizations (e.g., churches)
- Social welfare groups
- Politically motivated groups
- Rotary clubs
- Volunteer fire stations
- Labor unions
- Agricultural unions
- Social and recreational clubs (e.g., country clubs)
This is not an inclusive list of non-profit organizations.
